Raw Material Prices Tend to Stabilise amid Frequent Price Hike by Electric Car Makers

SHANGHAI, Mar 28 (SMM) –Led by Tesla and BYD, a growing number of electric car makers have announced price hike since March, and more are likely to follow suit. The price hike was essentially driven by soaring raw material prices.  

Upstream raw material prices

Refined cobalt

Refined cobalt prices continued to decline last week. Although refined cobalt inventory has fallen to extreme low level, COVID-induced downstream output cuts and volatile refined cobalt futures prices weighed on spot refined cobalt prices.

Cobalt intermediate product

The prices of cobalt intermediate products rose due to rising overseas refined cobalt prices and shipping problems last week, but the upside room was limited by poor domestic demand. The prices are expected to climb further this week.

Cobalt salt (cobalt sulphate and cobalt chloride)

The prices of cobalt salt were relatively stable last week. Bigger fluctuations of nickel prices created settlement problems for downstream buyers. Precursor producers had sufficient inventory and battery material producers reported increasing NMC precursor inventory, keeping cobalt salt prices in check. Some cobalt salt plants lowered their offers.

Cobalt salt (tricobalt tetraoxide)

Tricobalt tetraoxide prices rose last week. The price rise was driven by higher cobalt chloride prices, stable LCO production, and growing LCO demand from 3C sector as people worked from home amid the pandemic.

Nickel sulphate

The prices of battery-grade and electroplating-grade nickel sulphate were 47,000-49,000 yuan/mt and 50,000-53,000 yuan/mt respectively last Friday. Dramatic change in nickel futures prices virtually stagnated spot trades in nickel sulphate and other nickel-related markets.

Lithium carbonate

The prices of lithium carbonate were stable last week. On the supply side, the overall operating rates picked up, and higher temperature in Qinghai also contributed to higher output. On the demand side, orders from NMC cathode material producers were negatively affected by volatile nickel prices. The production suspension of some car models and high inventory at battery makers hurt the monthly orders for LFP, sending ripple effect to lithium carbonate. The demand from digital and e-bike sectors was weak.  The price negotiation between smelters and downstream buyers remained in a deadlock. Some traders lowered their offers to promote sales, but the trades were scarce. Lithium carbonate prices will remain stable this week under the support of downstream restocking and tight supply.  

Lithium hydroxide

The prices of lithium hydroxide rose slightly last week. Some smelters were still under maintenance, and the overall supply remained low. Volatile nickel prices slightly affected orders at some NMC cathode material producers. Pessimism over orders from battery makers following price hike by car makers and high lithium hydroxide prices intensified wait-and-see sentiment of NMC cathode material producers. Shipments from some traders slightly eased supply tightness, but transactions were thin. Although downstream buyers may start to restock this week, stable lithium carbonate prices will prevent lithium hydroxide prices from rising.
PCAM

PCAM (precursor of cathode active materials) prices fell last week. In terms of raw materials, the prices of nickel sulphate dropped in the first half of the week, while the prices of cobalt salt were stable. In the second half of the week, nickel sulphate prices rose slightly after nickel prices jumped. PCAM producers basically suspended making quotations amid unstable raw material prices and nickel prices, which may affect their orders next month.

NMC cathode materials

NMC cathode material prices stabilised last week, except for a slight drop in 8-series NMC cathode materials. In terms of raw materials, lithium salt prices inched higher, while PCAM prices fell slightly. Large NMC cathode material plants maintained high operating rates under the support of strong orders, while smaller producers performed not so well. Under the impact of volatile nickel prices and a wave of price hike by NEV makers, the demand from power battery market will face great uncertainties in Q2, while the demand from non-power battery market will remain weak. NMC cathode material prices are expected to rise slightly along with increasing PCAM costs.

LFP

LFP prices were flat last week. On the raw material side, lithium salt prices stabilised, while rising phosphoric acid and mono ammonium prices encouraged most iron phosphate plants to raise their quotations. However, it will still take time for higher raw material prices to pass onto LFP costs.  Recently, high LFP prices have suppressed demand from NEV, e-bike and energy storage markets, adding to uncertainty over future demand.

LCO

LCO prices were stable last week. Some LCO battery factories stopped making quotations, while others raised their quotations due to rising  raw material costs. Strong bargaining power of downstream buyers and limited purchases prevented LCO prices from going up.